Traditional Economy

Tahera Shinwar, Luis Sigler, & Carlos Linares

Traditional Economy

Tahera Shinwar, Luis Sigler, & Carlos Linares

What is a traditional economy?

It is an economic system in which the allocation of scarce resources, and other economic activity, is the result of ritual, habit, or custom. People are generally not free to make decisions on the basis of what they want or would like to have. Their roles are defined by customs of their elders and ancestors.

Advantages

Main advantage of this economy is that everyone knows which role to play. Little uncertainty exists over what to produce.

In some societies, you would provide for your immediate family.

This tradition dictates how people live their lives.

Disadvantages

The disadvantages of a traditional Economy is that it tends to discourage new ideas and new ways of doing things, as well as the strict roles of have an effect of punishing people who act up differently or break the rules. This economy also lacks in progress due to lack of new ideas. It is hard to find jobs tailored to you and your specific qualities. This makes it hard to find homes and is not a recommended economy to live in.